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May 14, 2003

Movies and Their Discontents


To contribute to 2blowhard’s ongoing discussion of movie-video-technology-and-economics, I’d like to cite a few facts and figures about movie budget trends from a story in the L.A. Times of May 13, which you can read here. To cut to the chase: for major studio releases the trend is up, up, up.

More money than ever is being poured into a concentrated number of films, many opening only days apart. A movie budgeted at more than $100 million used to be cause for widespread concern; this summer more than half a dozen titles — from "The Hulk" to "Charlie's Angels: Full Throttle" — easily exceed that.

The average studio movie budget climbed an eye-popping 23.3% in 2002 over 2001. The most expensive movie of the upcoming summer fleet will be "Terminator 3: Rise of the Machines," which cost about $200 million to make.

The business rationale is that such monsters are—potentially, at least—not only a source of multiple revenue streams via ticket sales, DVD sales, theme-park rides, etc., but also have the delightful side effect of increasing the value of the rest of the studio’s products:

If successful, these movies become bottom-line juggernauts overseas and in the DVD market, helping drive a studio's entire movie slate. One hit title can boost the sales price for an entire package of films sold in a pay-television deal…

Things are, obviously, great for 15-year-old boy movie buffs around the world, especially if they have relatively mainstream tastes. For the 2blowhards reader, the artistic consequences of this trend are, perhaps, less happy. These consequences include more sequels than ever—25 sequels or prequels will show up on movie screens in 2003, sixteen of them during the upcoming summer. The consequences also include fewer modestly budgeted adult dramas—apparently even talent agents are complaining that they can't find many projects for their A-list actors.

I feel like I’m watching a planetary re-alignment here—the major studios are unsurprisingly concentrating on the film genre in which they have a competitive advantage (the big budget effects-driven spectacular) and leaving an opportunity for filmmakers who have more creativity than money. Granted that may never be a very large population. One (somewhat lonely) example seems to be Robert Rodriguez, a 2blowhards favorite:

His first "Spy Kids" movie cost $36 million and was a huge hit, grossing $112.7 million in 2001. But his next sequel cost only $3 million more, and July's "Spy Kids 3-D: Game Over" also will cost just $39 million, even though 90% of the film is in 3-D.

"I just have a whole different philosophy," says Rodriguez, who performs an array of jobs on his films, including sound mixer and costume designer. "I use having less money to force me to come up with better ideas. And when you spend less money, you don't have somebody looking over your shoulder. You are more like a child finger-painting. You do whatever you want. And that's how your movie gets energy and life.

I say, bring on the digital technology, watch Moore's Law cut costs and hope for the best. The big studios seem to be headed towards the idea of putting 100% of their movie budget into one billion dollar super effects movie a year; if you want something else, other business structures will have to evolve to provide it.



posted by Friedrich at May 14, 2003


" The big studios seem to be headed towards the idea of putting 100% of their movie budget into one billion dollar super effects movie a year; if you want something else, other business structures will have to evolve to provide it."

I hope you're right. Given what I understand about distribution though, I see some barriers to this evolution. Oh well, Miramax has evolved as a fake indie source. That should count for something. Anyone with closer ties to the movie industry have an ballpark figures on how many movies Miramax buys in order to keep the competition in vaults?

On the bright side, I saw "Holes," and loved it, even though the director is a total hack. And Mexico has a film industry. Mucho gusto!

Posted by: j.c. on May 14, 2003 12:49 PM

The break up of the studio system, which in the short run lead to the "golden age" of "modestly budgeted adult dramas" of the late 1960s and early 1970s, was, in the long run, responsible for making this kind of movie economically unviable. The paradox is that the existence of these kinds of adult dramas can only be assured and protected by something like the classical studio system.

Posted by: JW on May 14, 2003 12:59 PM

Haven't sequels pretty much always been a Hollywood staple? Consider all the Topper movies, Hepburn & Tracey, Bogart's nior stuff, Abbott and Costello meet a monster, the "It Happened One Night" clones, Clint Eastwood Spaghetti westerns, John Ford's westerns, the Frankensteins and the Draculas, and {shudder} Andy Hardy (I *hate* Mickey Rooney). Not to mention Rockys, Godfathers, Planet of the Apes, and the Trinity films.

In other words do you consider sequels to a new phenomenon or a bad thing?

Posted by: Yahmdallah on May 14, 2003 01:04 PM


No, sequels are not a new phenomenon or, necessarily, a bad thing, but they are rarely the path of great adventure, commercially or artistically. And you have to admit that there are grounds for the cliche: "The sequel is never as good as the original."

I have always suspected (while wearing my businessman hat) that sequels are a sort of semi-conscious attempt on Hollywood's part to segment the market and offer a branded product to a particular segment. As a matter of fact, I've never understood exactly why this isn't done more frequently. During the early sound era, different movie studios specialized in different products--MGM (musicals), Warners (socially-conscious stories, crime dramas), Paramount (horror movies, I think), etc. This seems like a much more typical evolution for an American business than what has happened with film during my lifetime, where everybody tries their hand at everything. The net result is that the stars, rather than the studios, have developed "brands" (e.g., a "Tom Crusie" movie, or a "Harrison Ford" movie) and have reaped the financial rewards therefrom. My ultimate guess: the "business people" in the movie business don't seem like very good businessmen to me, but maybe that's just jealousy talking.

Posted by: Friedrich von Blowhard on May 14, 2003 01:41 PM

A billion-dollar movie -- now that's a spectacle I'd go see.

Funny how digital tech seems to drive things to extremes, isn't it? I mean, the big-and-bigger-budget overproduced digitally-enhanced extravaganzas vs. the scrappy, craft-less DV drone-a-thons. Where's the middle ground -- ie., my fantasy of human-centered movies with good skills and production values? Becoming archaic, I suspect. Good to hear that someone like Rodriguez is finding a happy balance in there. I hope more filmmakers do.

But, to play Mary Sunshine for a sec, do you suppose that, as the digital wave continues rolling through moviemaking, many more sortings-out are going to occur? I mean, maybe the sending-it-to-extremes thing is a phase, and maybe the middle-ground will make a comeback. Maybe someone will see a market opportunity there and pounce on it. We can hope, anyway.

Posted by: Michael Blowhard on May 14, 2003 03:40 PM

Michael said: "A billion-dollar movie -- now that's a spectacle I'd go see."

Shoot! You just missed it! Granted it was a made-for-TV movie, spaced out over a series of days. But still. It was called "Gulf War II." It had this really stirring ending with the president making a speech while wearing his flying suit about the enemy being nearly vanquished -- or was that "Independence Day"? ...sometimes it's hard to tell...

(Note for the humor impaired: No disrespect meant to the wonderful service men and women and their families who served and sacrificed, sometimes making the ultimate sacrifice, in the war.)

Posted by: Yahmdallah on May 14, 2003 04:18 PM

Friedrich, are you really lamenting the fact that the studios don't have any branding? Only industry types can tell you Britney's label, or Rushdie's publisher, or X2's studio: these are simply not important to the public, and trying to spend gazillions on a branding campaign would be quixotic. (The exception is Pixar, which puts out a tiny fraction of the number of films that any other studio releases.)

Posted by: Felix on May 14, 2003 08:43 PM


Contemporary Hollywood doesn't allow for branding in the same way as the old studio system did. The creation of these brands required the stability and security that only control of production, distribution, and exhibition could provide. Today, we see branding not from movie studios, but TV networks. Fox develops certain types of sitcoms (Married with Children, Malcolm in the Middle), the WB teen melodramas (Buffy, Charmed, Smallville), and HBO "quality" adult fare (The Sopranos, Six Feet Under, Band of Brothers). Part of the decline of the Big 3 networks owes to their inability to create a distinctive presence among hundreds of competing channels.

Posted by: JW on May 14, 2003 09:34 PM


Without having actually tried it (and, I grant you, in the business world there is many a slip twixt cup and lip), I don't see why branding wouldn't work. Contrary to your comment, there are certainly branded rap music labels. For a movie studio, such a strategy would just involve making a commitment to a particular genre of film, and then making sure you kept the quality up (most importantly, I suspect,in the writing.) Then, rather than letting the "Julia Roberts" or the "Sandra Bullock" brands reap most of the profits from romantic comedies, the "New Line Cinema" brand could collect those rents, using the endless supply of winsome actresses that prowl the streets of La La Land. I grant you the results might turn out to be a sort of hybrid between film and a TV series, but what's wrong with that? I first considered this when reading a story about how movie studios, who once made 15-18% ROE, were down in the sub-10% ROE basement, largely because the extra profits were being siphoned off to "name" actors and actresses--those $15 million paydays are hell on the bottom line.

J. W.:

You seem to have a theory about branding going here; I'd love to know exactly what the connection between the types of control you mention and a successful branding strategy. Nike doesn't seem to need branded retail outlets to manage a very successful brand. What am I missing?

Posted by: Friedrich von Blowhard on May 14, 2003 11:43 PM

Actually there has been at least a bit of movie-studio branding over recent decades -- Disney managed to semi-trademark a kind of non-animation movie for a few years (all those on-the-cheap Bette Midler comedies, for instance), and wasn't it Paramount that was the big promoter of the glossy, hustling Simpson/Bruckheimer style? These days, though ... I guess just Pixar, is that right? And Miramax? Do any other names mean anything to anyone? Didn't I read somewhere that even the Disney animation brand seems to be meaning less to audiences?

But branding's an interesting question in the media and showbiz generally. One of the ways book publishing drives the people who work in the business crazy, for instance, is that so many book published are their own thing -- unique products, in other words, needing unique treatment. No stamping out cookies here! (Compare a Barnes and Noble to a Home Depot, for instance -- probably 80% of the products in a B&N are one-of-a-kind, where almost everything at a Home Depot is an example of a pre-existing thing: a crew, a plier, a window screen....)

So a kind of Holy Grail for business-minded publishers has been to establish brands: franchises, basically. A little something to count on. Dorling Kindersley has been pretty successful making those wonderful illustrated reference books (cut-out photos against white backgrounds, blocks of text)-- you may not know they're DK, but you recognize the kind of book they are. (I'm a big DK fan.) Putnam for years did their best to deal only with fiction authors who they could genuinely treat as franchises -- people who turned out recognizable brand-name stuff on at the very least a yearly basis. The "For Dummies" series was a kind of publishing biz breakthrough, if I remember right -- one of the first times a book franchise succeeded on that scale. (You're interested in making cabinets? Well, you might go looking for "Cabinetry for Dummies" instead of snooping through dozens of cabinetry books by plain ol' authors. You know the brand, you know how they treat the subject, you know it'll be pretty good ...) And of course, years ago Penguin put that orange border around its paperbacks.

So, in book publishing anyway, there's this constant back and forth tension between the unique-product thing (which is what many people want from a book, and certainly why many authors and publishing people got into the biz -- the sense of it as a kind of handicraft rather than mass-manufacturing field) and the business imperative towards standardization and franchising.

What keeps the world of books somewhat freer of insane financial pressures than something like the TV or movie worlds is that it's still relatively cheap to make a modest book -- even cheaper than making a no-production-values DV movie. So people can still take chances, do it themselves, why not. And there are so many books -- 50-60,000 new titles a year. There's room for experimental poetry as well as sequels to knitting books. Plus, computers make creating and publishing a book much more easy than it's ever been. Even as the big corporate publishers focus more on the bottom line, many many self-publishers and tiny publishers are cropping up. (Some of whom are doing their best to brand themselves...)

All that said, of course, people are reading less and less every year...

Posted by: Michael Blowhard on May 15, 2003 11:31 AM


I'm not sure if I have a definite theory, but branding certainly requires a certain level of stability of producer and product. That is, a brand tells buyers what they are getting, and where it is coming from. The anti-trust lawsuits, the rise of TV, and other social and economic upheavals (especially rising interest rates) that dissolved the studio system sent the studios into an identity crisis they have yet to recover from (the most visible sign of this idenity crisis are the feeble attempts to assign authorship to various production companies through those little logo films that play one after another at the beginning of movies, such as the Dreamworks fisher-boy, etc.). The control that the studios had during their heyday made them more or less certain of their products finding an audience, and if an individual movie didn't, practices such as block-booking would ensure that the success of other movies would more than recover their losses. They could count on having a stable audience. The studios' identity crisis destroyed this kind of audience. I'd agree that sequels are an attempt to build stable audiences.

Posted by: JW on May 15, 2003 09:56 PM

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